When Your First Child Is Born, You Begin to Save

question 96

Multiple Choice

When your first child is born, you begin to save for college by depositing $500 per month in an account paying 6% interest per year. With a continuous stream of investment and continuous compounding, how much will you have accumulated in the account by the time your child enters college 18 years later?

• A)$972.34
• B)$294,467.96
• C)$394,467.96
• D)$66,040.45
• E)$194,467.96

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Definitions:

Troubled Asset Relief Program (TARP)

A program created by the U.S. government in 2008 to purchase toxic assets and equity from financial institutions to strengthen the financial sector.

Emanuel African Methodist Episcopal Church

A historic African American church located in Charleston, South Carolina, known for its role in the civil rights movement and as a site of a tragic mass shooting in 2015.

Racial Inequality

The significant disparities in opportunity, treatment, and socioeconomic status experienced by different races, often as a result of systemic racism embedded in society's structural mechanisms.